Crypto Market Meltdown: Dogecoin, Ether Drop 9% as Bitcoin’s Slide Triggers $700M in Liquidations
Leverage-fueled traders took a massive hit as Bitcoin (BTC) tumbled 4.5%, falling below $80,000 and sparking a widespread sell-off that wiped out $700 million in bullish bets. Dogecoin (DOGE) and Ether (ETH) led the downturn, each sinking 9% over the past 24 hours.
The fallout was brutal for long traders, with BTC bulls losing $420 million and ETH longs suffering $150 million in liquidations. DOGE holders weren’t spared either, with $30 million in long positions getting wiped out. Other major altcoins also felt the pressure—Solana (SOL) dropped 8%, while XRP slid 7%. The broader CoinDesk 20 Index (CD20) slumped over 6.5%, reflecting widespread risk-off sentiment.
Margin Calls Drive Forced Exits
The sharp downturn also triggered a decline in BTC futures open interest, which dropped 7% to $45 billion, signaling that traders were being forced out of positions due to margin calls.
“Investors are adopting a more defensive stance as expectations for a Federal Reserve rate cut wane following steady U.S. jobs data. There’s also growing anticipation that February’s CPI report could mirror January’s inflationary trend,” Nick Ruck, director at LVRG Research, told CoinDesk in a Telegram message.
“Many traders may remain on the sidelines until there’s more clarity on the U.S. economic outlook and a stronger case for monetary easing, which may not materialize until later this year,” Ruck added.
Macroeconomic Uncertainty Weighs on Risk Assets
Monday’s losses extended a two-week crypto market downturn, exacerbated by broader global market weakness. The S&P 500 and Nasdaq kicked off the week deep in the red, down 2% and 3%, respectively. Renewed fears over incoming U.S. trade tariffs and recessionary warnings—fueled by comments from Donald Trump over the weekend—spooked investors.
The sell-off marked the biggest single-day decline in U.S. equities since September 2022, with the ‘Magnificent 7’ tech giants collectively shedding $830 billion in market value.
A stronger U.S. dollar, along with the Federal Reserve’s recent hawkish stance—which signaled fewer rate cuts for 2025—has further pressured crypto markets. Investors have flocked to traditional safe-haven assets like gold and the Japanese yen, further dampening risk appetite.
Could Capitulation Lead to a Relief Rally?
Despite the grim outlook, a contrarian signal suggests a potential short-term rebound. The Crypto Fear & Greed Index currently sits at 15, deep in “extreme fear” territory—historically a level that precedes relief rallies.
Market analysts at Singapore-based QCP Capital highlighted key macroeconomic factors that could influence crypto’s next move.
“Even amid the current turmoil, not all indicators are bearish. This flight to safety has driven 10-year Treasury yields down by about 60 basis points and softened the U.S. dollar—both historically supportive for USD-denominated risk assets like equities and crypto,” QCP noted in a market update.
“Lower yields also ease borrowing costs for the U.S. government at a critical time, particularly as Trump’s proposed policies—including tax cuts and expansionary fiscal measures—take shape,” the firm added.
While the immediate outlook remains uncertain, traders will be closely watching Treasury yields and dollar strength for further cues on potential reversals in risk assets.
